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1
Investor
Presentation
Q3 2018 Audited Results
Egypt’s fastest growing pharmaceutical distributor
2nd largest pharmaceutical distributor with a
market share of 20.2%
c.42k clients served annually through a
network of 57 operational sites and a fleet of
654 vehicles
5-year revenue CAGR of 31% compared to
market CAGR of 17%
2
THIS DOCUMENT CONTAINS STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, “FORWARD-LOOKING STATEMENTS” WHICH ARE
NOT HISTORICAL FACTS BUT RATHER ARE STATEMENTS OF FUTURE EXPECTATIONS AND PROJECTIONS BASED ON MANAGEMENT’S
VIEWS AND ASSUMPTIONS REGARDING TRENDS IN THE EGYPTIAN, MIDDLE EASTERN, EUROPEAN AND INTERNATIONAL FINANCIAL
MARKETS AND REGIONAL ECONOMIES, THE POLITICAL CLIMATE IN WHICH THE COMPANY OPERATES AND OTHER FACTORS. THESE
FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE WORDS
“ANTICIPATES,” “BELIEVES,” “ESTIMATES,” “EXPECTS,” “INTENDS,” “MAY” OR “SHOULD,” OR, IN EACH CASE, THE NEGATIVE OR OTHER
VARIATIONS OR COMPARABLE TERMINOLOGY OR BY DISCUSSIONS OF STRATEGIES, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS
OR INTENTIONS. FORWARD-LOOKING STATEMENTS APPEAR IN A NUMBER OF PLACES THROUGHOUT THIS DOCUMENT AND INCLUDE
STATEMENTS REGARDING MANAGEMENT’S INTENTIONS, BELIEFS OR CURRENT EXPECTATIONS CONCERNING, AMONG OTHER
THINGS, THE COMPANY’S RESULTS OF OPERATIONS, FINANCIAL CONDITION, LIQUIDITY, PROSPECTUS, GROWTH, STRATEGIES AND
DIVIDEND POLICY AND THE DEVELOPMENT OF INDUSTRIES IN WHICH THE COMPANY OPERATES.
THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES, MANY OF WHICH MAY BE
BEYOND THE COMPANY’S CONTROL. THEREFORE, IMPORTANT FACTORS MAY BE OF CONSEQUENCE TO THE COMPANY’S ACTUAL
FUTURE RESULTS INSOFAR THAT THEY MAY DIFFER MATERIALLY FROM EXPECTATIONS. ALL FORWARD-LOOKING STATEMENTS
SPEAK ONLY AS AT THE DATE OF THIS DOCUMENT. NEITHER THE COMPANY, THE SHAREHOLDERS NOR THE SELL-SIDE ADVISOR
UNDERTAKE ANY OBLIGATION TO UPDATE, REVISE, OR STATE PUBLICLY ANY CHANGE IN FORWARD-LOOKING STATEMENTS,
WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE.
ALTHOUGH THE COMPANY BELIEVES THAT THE PLANS, INTENTIONS, AND EXPECTATIONS REFLECTED IN, OR SUGGESTED BY, THE
FORWARD-LOOKING STATEMENTS MADE IN THIS DOCUMENT ARE REASONABLE, THE COMPANY MAY NOT ULTIMATELY ACHIEVE SUCH
PLANS, INTENTIONS, OR EXPECTATIONS. THESE CAUTIONARY STATEMENTS QUALIFY ALL FORWARD-LOOKING STATEMENTS
ATTRIBUTABLE TO THE COMPANY OR ANY PERSON(S) ACTING ON ITS BEHALF. BY ACCEPTING RECEIPT OF THIS DOCUMENT, THE
INVESTOR ACKNOWLEDGES ITS STRICT CONFIDENTIALITY. THIS DOCUMENT MAY NOT BE COPIED, REPRODUCED, OR DISTRIBUTED
TO OTHERS AT ANY TIME WITHOUT PRIOR WRITTEN CONSENT OF THE COMPANY.
Disclaimer
3
Introduction to the Company
Key Investment Highlights
Appendix
Contact Information
I
II
III
IV
Agenda
4
II Introduction to the Company
The Company in numbers
654 Distribution vehicles in Q3 2018
5,500+ Employees
31% Gross Revenue CAGR from 2012-2017
Largest pharmaceutical distributor with c.20.2% market share¹ in Q3 2018 2nd
c.42k Retail pharmacies, hospitals & wholesalers served in Q3 2018
50% Net Profit CAGR from 2012-2017
Experience in pharmaceutical distribution17+ years
Over 350 Multinational & local pharmaceutical suppliers, covering over 93% of the market value
57 Operational sites in Q3 2018, including distribution hubs and warehouses
EGP407.0 mn 9M 2018 EBITDA
EGP9.7 bn 9M 2018 Gross Revenues
Growing pharmaceutical distributor in Egypt #1
(1) Market share covers pharmacy retail sales which represent the majority of Egypt’s pharmaceuticals market
Source: IMS Health, Company Management
5
Ibnsina Pharma, Egypt’s fastest growing pharmaceutical distributor…
II Introduction to the Company
(1) Post IPO & Capital Increase; (2) Pro forma gross revenue includes part of 3PL revenue that was stated as other income until 2016
Source: IMS Health, Company Management
Mahgoub Group16.2%
Abdel Gawad & Family
16.5%
EBRD10.1%
Faisal Islamic Bank
12.6%
Senior Management
& Others7.2%
Free Float37.4%
Environmental Health & SafetyRoad SafetyQuality
Certifications
Company Overview
Shareholding Structure 1
Established in 2001, Ibnsina Pharma “ISP” is the fastest growing, and 2nd
largest, pharmaceutical distributor in Egypt with a market share of c.20.2%
Nationwide distribution network with 57 operational sites including distribution
hubs and central warehouses, supported by a fleet of c.650 vehicles serving
c.42k retail pharmacies, hospitals & wholesalers across Egypt
Pioneer in introducing value added services for its customers including
telesales, same-day-delivery and creative commercial activities, in addition to
third party logistics services for its suppliers including; warehousing,
transportation, data analytics, packaging and relabeling, and quarantine
inspections
Market Share¹
9.9% 20.2%2009 Q3 2018
Key Suppliers
2,535 3,361 4,302
5,439 7,372
9,818 6.8% 6.8% 7.2% 7.3%
7.9%8.6%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
2012 2013 2014 2015 2016 2017
62 89 122 155 229
406 2.4% 2.7% 2.9% 2.9% 3.2%
4.2%
2012 2013 2014 2015 2016 2017
23 35 38 57 102
170 0.9% 1.0% 0.9%
1.1%
1.4%
1.8%
2012 2013 2014 2015 2016 2017
Gross Revenue2 & GPM | EGP mn, % EBITDA & Margin | EGP mn, %
Net Profit & Margin | EGP mn, % RoE | %
32%
41%36%
32% 33%
47%
2012 2013 2014 2015 2016 2017
Key Financial Highlights
6
…with a proven track record of success…
Market Share
7.0%
Established in 2001 under the name
“Ibnsina Laborex” in partnership with
Pinault Printemps Redoute (“PPR”)
through its subsidiary Eurapharma
Launch: 2001-2005
7 Operational Sites
12k Clients
RevenueEGP 665mn
2005
8.8%
Management buy-out of PPR shares,
name changed to “Ibnsina Pharma“;
optimized cost structure & turned the
Company profitable
Turnaround: 2006-2008
7 Operational Sites
16k Clients
RevenueEGP 1.0bn
10.5%
Investment to add 15 distribution
centers & 5 offices, and enhance
efficiency through standardizing
operational processes
Expansion: 2009-2012
27 Operational Sites
30k Clients
RevenueEGP 2.5bn
2015
In partnership with
20.2%
Capture market share through
implementing value-base differentiation
strategy & launch of new revenue
streams focusing on enhancing margins
Growth: 2013-Present
57 Operational Sites
c.42k Clients
9M 2018 RevenueEGP 9.7bn
2008
2012
3Q18
II Introduction to the Company
Source: IMS Health; Company Management
7
69.1%
15.2%
9.8%
2.4%3.2% 0.3%
Pharmacies Wholesale Tenders
Hospitals Personal Care 3PL & Other
37.7%
5.8%
3.7%11.3%
41.5%
Sites Technology
Vehicles Maintenance
HQ
…optimally expanding our distribution network to unlock value….
Distribution Network
28.530.4
32.1
39.9
42.3
2014 2015 2016 2017 9M18
No. of Sites (Rev/Site – EGP mn)
43 Distribution Centers (DC)
2 Reverse Logistics Warehouses
2 Personal Care DC
5 Platforms (Inbound Logistics)
1 Tender DC
4 3PL1 Warehouses
9M 2018
II Introduction to the Company
(1) Third Party Logistics
Source: Company Management
Number of Clients
Revenue by Business Line
49 55 53 57
144 174 127 166
2016 2017 9M17 9M18
No. of Vehicles (Rev/Vehicle – EGP mn)
No. of Employees (Rev/Emp – EGP 000s)
CAPEX Breakdown
9M 2018
546 601 605
654
13.2 16.0 11.1 14.4
2016 2017 9M17 9M18
5.5K 5.7K 5.6K6.0K
1,310 1,692 1,204 1,565
2016 2017 9M17 9M18
8
31.1%
28.4%
26.0%
14.5%
39,655Retail Pharmacies
42.9%
34.1%
12.3%
10.7%
756Wholesale Clients
44.1%
25.0%
17.1%
13.8%
31.8%
28.4%
25.4%
14.4%
…and leveraging our network to serve our c.42k customers nationwide
II Introduction to the Company
1,886Hospital Clients
Cairo & Canal Delta Upper Egypt Alexandria
42,297Total Customers
Clients by Geography (9M 2018)
9
Key Investment Highlights
10
Key Investment Highlights
III Key Investment Highlights
Attractive Industry
DynamicsA highly defensive sector with significant room for continued growth driven by recent regulatory reforms, increasing
incidence of chronic disease, and a surge in generic uptake
Strong
Market ShareFastest growing & 2nd largest player in the market with nationwide geographical coverage and access to over 42k retail
pharmacies, hospitals & wholesalers
Robust Financial
PerformanceSignificant top and bottom line growth on the back of recent regulatory reforms and enhanced operational efficiency
Solid Demographic
ProfileA rapidly growing population coupled with a growing middle class and increasing healthcare awareness, positions Egypt
as one of the most attractive consumer markets in the region
Experienced
Management TeamHighly experienced management team that has delivered strong results during challenging times, coupled with strong
corporate governance practices backed by notable institutional shareholders
Efficient Business
ModelOperational efficiency driven by best in class supply chain processes
Resilient
Supply ChainMulti-site operations with highly diversified supplier/client base, covering over 80% of the market SKUs, mitigating any
supply chain disruptions and ensuring business continuity
New
Revenue StreamsExpansion into higher margin diversified revenue streams to further enhance profitability
1
2
3
5
4
6
7
8
Source: Company Management & IMS Health
11
2.1%
1.9%
1.7%
1.5%1.5% 1.4% 1.4%
1.1%1.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Kuw
ait
Egyp
t
KS
A
Bah
rain
Jo
rda
n
UA
E
Om
an
Mo
rocco
Tu
nis
ia
43%
57% 45%
55%
13%
20%
17%
29%
12%
8%
0-4 yrs
4-14 yrs
15-24 yrs
25-44 yrs
45-59 yrs
60+ yrs
An increasingly aging, more urbanized demographic profile drives an
increase in health awareness
Egypt has seen a growth in health awareness on the back of a growing
middle class and rising GDP per capita and decreased government
spending
93
95
97
99
101
102
1.8% 1.9% 1.9% 1.9% 1.7% 1.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
88
90
92
94
96
98
100
102
104
2016 2017e 2018e 2019e 2020e 2021e
Population (mn) Growth Rate
Population CAGR I 2015-2020 Urbanization CAGR I 2015-2020
4.0%3.8%
2.4%2.2%
2.0%1.9% 1.9%
0.7%
0.2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Age Pyramid Population I mn Urban Population Disposable Income | EGP bn
2,380
2,931
3,381
3,914
4,445
4,966
-
1,000
2,000
3,000
4,000
5,000
6,000
2016 2017e 2018e 2019e 2020e 2021e
2025f
2015
III Key Investment Highlights
8.1%
5.8%
5.2%
3.7% 3.5% 3.5%3.2%
2.4%
0.8%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Egyp
t
KS
A
Mo
rocco
Tu
nis
ia
Jo
rda
n
Kuw
ait
UA
E
Bah
rain
Om
an
Population Age 65+ as % of Total Population I 2020
Source: BMI, WHO
Solid Demographic ProfileEgypt’s demographic profile makes it the region’s largest consumer market
1
12
Attractive Industry Dynamics (I/II)A highly defensive sector with significant room for continued growth
12%
10%9%
8%8%
5% 5% 5%
3%
0%
2%
4%
6%
8%
10%
12%
14%
Egyp
t
Om
an
Kuw
ait
Bah
rain
Jo
rda
n
Tu
nis
ia
Qata
r
Mo
rocco
KS
A
1922
2528
32
41
50
2011 2012 2013 2014 2015 2016 2017
Total Pharmacists I 2016 ‘000
212
23 10 3 12 7 -
50
100
150
200
250
Pharmaceutical Sales | EGP bn Total Number of Pharmacies | ‘000Health Expenditure CAGR 2013-2017
CAGR 17%
56 5756 56
60 60
2012 2013 2014 2015 2016 2017e
Egypt’s healthcare market is the fastest growing in the region
driven by significant growth in the pharmaceuticals market
Given the under-penetration of healthcare insurance, pharma
sales are mainly driven by out-of-pocket expenditure as consumers
find self-medication to be the cheapest form of treatment
13 1415
18
25
9%
6%
10% 20%
37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
-
5
10
15
20
25
30
2013 2014 2015 2016 2017
Average price per unit Growth rate %
Market Price Evolution
III Key Investment Highlights
2
Distributors operate on a
fixed margin set out by the
Ministry of Health (MoH),
and is marked down from
the regulated price of the
SKU
Which significantly mitigates
any risks related to
bargaining power of
suppliers/clients
Industry Regulated Margins
2016
Increase in price of medicine that cost less than EGP
30 by 20% due to increase in production costs
Increase in distribution margin from 7% to 8.1% for
non-essential locally manufactured products
Retail price increase of 30-50% for over 3k SKUs
Price increase of c.50% for MoH’s tenders 2017
8%
25%
Distributors Retailers
Regulated Price
Source: IMS Health, BMI, WHO
13
Ezaby 4%
Seif 2%
Roushdy 2%
Misr 1%Other 92%
Attractive Industry Dynamics (II/II)A highly defensive sector with significant room for continued growth
III Key Investment Highlights
2
Private Sector49%
Multinational48%
Public Sector 3%
(1): Data As of 9M18
Source: IMS Health, BMI, WHO
ISP 20.2%
UCP32.9%
POS 15.0%
Others31.9%
Novartis 8%
GSK 6%
Sanofi 5%
Pharco 5%
Amoun 5%
Eipico 4%
Eva 4%
Pfizer 3%
Hikma 2%Global Napi 2%
Others56%
Pharma Market Share
FY 2017 Manu. RetailDist.1
The distribution space is the most consolidated segment, with the 3 largest players processing 68% of the market sales
Growth Drivers
Market Segmentation I Market Share FY2017
Higher Priced Drug
Replacements
$DDDDDD
GENERIC
Pricing Adjustment
Waves
Increasing Generic
Uptake
Increase of
Chronic Diseases
Ageing & Growing
Population
New Products –
New Markets
14
32.7%
9.9%
13.6%Others43.7%
2011 9M 2018
ISP is the fastest growing distributor in the Egyptian market
The distribution market has been experiencing a trend of consolidation towards
larger market players, as both manufacturers and pharmacies prefer to deal
with fewer number of distributors with larger capabilities and more value-add
18%
10%
14% 13%
30%
20%
30%
26%
31%
26% 26%
42%
37%40%
2012 2013 2014 2015 2016 2017 9M18
Egypt Pharma Market Growth ISP Sales¹ Growth y-o-y
ISP has been constantly outperforming the market… …while increasing its profitability | Net Profit Margin %
Over 100% increase
III Key Investment Highlights
Strong Market ShareExceptional profitable growth on the back of a solid value-based differentiation strategy
3
(1) Based on ISP’s pharmacies sales value as per IMS Health data which is based on retail selling price
Source: IMS Health, Company Management
9.9% 10.5%
12.6%13.9%
15.4%16.9%
19.2%20.2%
2011 2012 2013 2014 2015 2016 2017 9M18
ISP Market Share Progression
15.0%
20.2%
32.9%
Others31.9%
1.1%
0.9%
1.1%
1.4%
1.8%
2.0%
2013 2014 2015 2016 2017 9M18
15
Highly efficient supply chain utilizing advanced technology
Mobile Racks
Enhances capacity
management and
increases shelf space
by approximately 2.5x
Fleet Tracking
Sets geo-fence to
support route
optimization and ensure
efficient product
delivery
In-p
rog
ress E
nh
an
cem
en
ts
Order Picking
Error proofing tool,
decreases order fix time
and speeds up shelf
replenishment process
Field Force Mobility
Solutions
Ability to manage schedule,
track visits, create orders,
process returns, and receive
customer feedback
Enterprise Asset
Management
Ability to manage procurement &
warehousing processes, in
addition to tracking maintenance
for equipment & vehicles
Call Center Management
Manages call scheduling and
handling, utilizing a newly
improved sales interface
B2B Module
Customer order management
tool includes features such as
placing & tracking orders with
further integration into an
online sales platform
Work Flow
Module
Enhances internal
communication and optimizes
internal approval cycles
Transportation Management
System
Enhances inbound shipments,
collects data for route
optimization, facilitates sales,
collections and returns
III Key Investment Highlights
4
Ordering Data Processing
Delivery to platforms Delivery to clients
Demand Planning
Order Preparation
Product Flow
Information Flow
Distribution Value Chain Overview
DistributionProcessingSourcing
Suppliers Clients
Over 200 platform operations employees handle and
dispatch inbound deliveries to distribution centers
c.860 telesales agents communicate daily with c.42k
clients, processing over 450k orders monthly
1.5k warehouse staff perform order picking & packaging
Dynamic route optimization to enhance delivery
performance
A fleet of 654 vehicles handles order delivery from
distribution centers to c.42k clients nationwide
Over 5.5mn drops completed per annum
Commercial team sources orders from 350+ suppliers
while focusing on maintaining market competitiveness
and managing inventory levels
Monthly demand forecasting for over 9.5k SKUs
Expired inventory risk fully borne by suppliers
Efficient Business ModelOperational efficiency driven by best-in-class supply chain processes
Source: Company Management
16
Sanofi Aventis 7%Amoun 5%
Novartis 4%
Mina Pharm 3%
Glaxo Smith Kline 3%
Others79%
Diversified Geographical Presence
Distributed by ISP 93%
Not Distributed by ISP 7%
Expansive SKUs CoverageMinimal Supplier Concentration
Resilient Supply ChainHighly diversified supplier/client base significantly mitigating supply chain risks
% of
Sales
Low client concentration risk due to small number of pharmacy chains in Egypt
Cairo & Canal region has the highest sales contribution due to higher purchasing
power
Multiple Contracts with Key Suppliers
Product portfolio covers 85% of the SKUs
available in the market, collectively
representing 93% of the market sales
value
Minimal supplier concentration with the
top five supplier representing less than
25% of sales
III Key Investment Highlights
5
% of
Sales
% of Market
Sales
Source: IMS Health; Company Management
Cairo & Canal 31.8%
Delta 28.4%
Upper Egypt 25.4%
Alexandria 14.4%
Minimal operational risk
57 sites with 57 lifetime
licenses$
No FX Risk
No SKU
Concentration
(Each SKU ≤ 0.5%
of sales)
17
Robust Financial PerformanceRobust financial performance with double digit top line and bottom line growth
6
▲ 31.9% y-o-y
3Q18 Net Revenues
EGP 3.5 BN
▲26.1% y-o-y
3Q18 Gross Profit
EGP 343.5 MN
▲ 20.3% y-o-y
3Q18 EBITDA
EGP 196.9 MN
▲ 28.3% y-o-y
3Q18 Operating Profit
EGP 156.3 MN
▲ 26.6% y-o-y
3Q18 Net Profit
EGP 113.2 MN
▲ 31.7% y-o-y
3Q18 Normalized Net Profit
EGP 125.4 MN
(1) Normalized Net Profit factors out one-time charges in 9M18 of EGP 42 million.
Source: Company Management
18
3,361
4,302
5,439
7,372
9,818
6,872
9,683
2013 2014 2015 2016 2017 9M17 9M18
41%36%
32% 33%
47%
41%
29%
2013 2014 2015 2016 2017 9M17 9M18
III Key Investment Highlights
Source: Company Management
CAGR 31%
Gross Revenue1 | EGP mn
35 38 57
102
170 143
188 1.0%0.9%
1.1%
1.4%
1.8% 2.0%2.1%
2013 2014 2015 2016 2017 9M17 9M18
Net Profit & Margin | EGP mn, %
89 122
155
229
406
295
407 2.7%
2.9% 2.9%3.2%
4.2%
4.4%4.3%
2013 2014 2015 2016 2017 9M17 9M18
EBITDA & Margin | EGP mn, %
Robust Financial PerformanceRobust financial performance with double digit top line and bottom line growth
6
ROE | % Return on Fixed Assets | %
48%
37%42%
63%
89%
75%81%
2013 2014 2015 2016 2017 9M17 9M18
Gross Profit | EGP mn, %
228 307
394
569
826
598
808 6.8%7.2% 7.3%
7.9%
8.6%8.9% 8.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
2013 2014 2015 2016 2017 9M17 9M18
(1): Pro forma gross revenue includes part of 3PL revenue that was stated as other income until 2016
YoY 46.2% CAGR 37%YoY 35.1% CAGR 46%
YoY 38.1%
CAGR 50% YoY 31.6% In equity from IPO proceeds
19
DOH
Inventory
CCC
Receivables
Payables
215%
65%17%
-30%
70%30%
2014 2015 2016 2017 9M17 9M18
2.5x 2.8x 3.1x3.5x 3.2x
4.6x
2014 2015 2016 2017 9M17 9M18
Net Debt to Equity Ratio Facilities Breakdown | % of Authorized LimitInterest Coverage Ratio1
18%
12%
12%
9%8%
8%
7%
7%
6%
6%
5% 3%
Supplier contracts have the option of credit terms ranging from 120-150days or a cash discount of 5-6%
CIB
Ahli United
Bank
HSBCNational
Bank
Credit
Agricole
Mashreq
Barclays
QNB
Bank
Audi
United
Bank
Arab
Bank
Others
Sep-2018
EGP 1.7 bnNet Debt | EGP mn
237 163
54
(133)
279 292
2014 2015 2016 2017 9M17 9M18
Financial Lease Expense | EGP mn
5865 66
3628
21
2014 2015 2016 2017 9M17 9M18
2015
III Key Investment Highlights
(1) Calculated as EBITDA over interest expense
Source: Company Management
Robust Financial PerformanceEffective working capital management has been a key success factor to ISP’s performance
6
+5 days
32 days
112 days
85 days
2016
-2 days
29 days
114 days
83 days
2017
-11 days
29 days
128 days
83 days
9M 2017
+1 days
33 days
116 days
84 days
9M 2018
-2 days
34 days
119 days
83 days
20
New Revenue StreamsExpansion into high-margin diversified revenue streams to further enhance profitability
Capitalizing on a growing need for specialized transportation services, ISP invested in
providing high quality services to pharma manufacturers and notable FMCG brands such
as Unilever.This business complements the warehousing activity.
Transportation
851,691
3,5116,121
4,133
11,052
2014 2015 2016 2017 9M 17 9M 18
Revenue | EGP ‘000
Warehousing services for suppliers which allows them to save significant CAPEX. ISP
invested in 4 warehouses including a mega-warehouse, adding a capacity of 11k pallets
to reach a total capacity of 19.7k pallets. The warehousing business is a key area for
growth going forward.
Warehousing
Revenue | EGP ‘000
3,657 4,6416,249
8,95810,747
7,716
11,640
2013 2014 2015 2016 2017 9M 17 9M 18
7
III Key Investment Highlights
Source: Company Management
2,8925,922 7,647
10,351
5,846 7,315
2013 2014 2015 2016 2017 9M 17 9M 18
Other
Revenue | EGP ‘000
ISP offers overprinting and re-packaging of pharmaceutical products to comply with national regulations and to support manufacturers for promotional needs. This business
complements the warehousing activity.
Other revenue also includes exports , fleet advertising, market micro-research for manufacturers, bulk SMS, and various service-oriented business lines.
.
21
Experienced Management TeamHighly experienced management team with strong track record
III Key Investment Highlights
8
28 years of pharmaceutical industry experience with focus on commercial operations, IT, quality assurance and administration.
Prior to Ibnsina, Mahmoud held several senior-executive positions at various pharmaceutical companies in Egypt and abroad.
B.S in Pharmacy from Cairo University and MBA from the Arab Academy for Science and Technology.
Mahmoud Abdel Gawad
Co- Founder & Co-CEO
17 years of pharmaceutical industry experience with focus on finance, sales, marketing and human resources.
Prior to becoming Co-CEO, Omar has held various positions including marketing manager, sales manager and general manager.
B.A in Economics from the American University in Cairo and MBA from the Arab Academy for Science and Technology.
Omar Abdel Gawad
Co- Founder & Co-CEO
19 years of corporate finance and treasury experience with focus on financial management, treasury, accounting, budgeting and credit.
Prior to Ibnsina, Momen spent 4 years as an accountant at the Egyptian Pharmacists Company (EPC), a local pharma distributor.
B.A in Commerce from Ain Shams University.
Momen Gomaa
CFO
23 years of pharmaceutical industry experience with focus on pharmaceutical sales.
Rabeea has played a key role in increasing Ibnsina’s market share and surpassing market growth rates over the past 6 years.
B.S in Veterinary Medicine from Alexandria University and MBA from the Arab Academy for Science and Technology.
Rabeea Marzouk
Sales Director
17 years of pharmaceutical industry experience with focus on operations management.
Mohamed is responsible for management of all warehouses, purchasing, technical development and third-party logistics activities.
B.A in Commerce from Ain Shams University and MBA from the Arab Academy for Science and Technology.
Mohamed Adel
Operations Director
17 years of pharmaceutical industry experience with focus on commercial operations and business development.
Ibrahim leads the development of strategic supplier partnerships as well as import and export activities.
B.A in Commerce from Ain Shams University and MBA from the Arab Academy for Science and Technology.
Ibrahim Emam
Commercial Director
Source: Company Management14 years of experience in investor relations and corporate and family governance.
Prior to joining Ibinsina Pharma, he served as Head of IR at Mezzan Holding, Kuwait and Senior Manager of IR at Egyptian Resorts Co. (ERC).
B.A. in Economics and MBA from Arab Academy for Science and Technology , Certified Investor Relations from UK IR Society
Mohamed Shawky
IR Manager
22
Experienced Management TeamSeasoned board of directors with diverse experience across various industries
III Key Investment Highlights
8
Over 40 years of experience across various industries including healthcare, FMCG, and financial services with focus on all investment activities
pursued by the Company
Mohsen was the co-founder of several successful businesses in Egypt including; Chipsy (later acquired by PepsiCo), Al Shorouk Hospital (later
acquired by Abraaj Group), Al-Masreyin Dairy (later acquired by Citadel Capital), and Incolease – Egypt’s largest leasing company.
Moshen is the Chairman of the Arab International Investment Group, currently serves on the boards of Faisal Islamic Bank of Egypt and Dar El
Eyoun Hospital, and has served on the boards of SAIB Bank and Incolease.
Mohsen Mahgoub
Executive Chairman
28 years of pharmaceutical industry experience with focus on commercial operations, IT, quality assurance and administration.
Prior to Ibnsina, Mahmoud has held several senior-executive positions at various pharmaceutical companies in Egypt and abroad.
B.S in Pharmacy from Cairo University and a MBA from the Arab Academy for Science and Technology.
Mahmoud Abdel Gawad
Executive Director
17 years of pharmaceutical industry experience with focus on finance, sales, marketing and human resources.
Prior to becoming Co-CEO, Omar has held various positions including marketing manager, sales manager and general manager.
B.A in Economics from the American University in Cairo and a MBA from the Arab Academy for Science and Technology.
Omar Abdel Gawad
Executive Director
41 years of experience in finance and banking across several countries.
Lindsey has held several positions with EBRD, until 2017, where he managed multiple equity investments in excess of EUR 2.5bn.
Prior joining EBRD in 1994, he spent 13 years with the British Linen Bank.
B.A in Jurisprudence from Oxford University and a MBA from INSEAD.
Lindsay Forbes
Non-Executive Director
Source: Company Management
Extensive experience in technology and entrepreneurial investment.
Mr Abdallah is on the board of several companies and is one of the founding members of Raya Holding, holding the posts of Managing
Director, CFO, and finally CEO of the company. Prior to that, he served as Chief Business Officer for Vodafone Egypt.
MBA from Aston Business School in Birmingham, UK.
Amr Abdallah
Independent Director
Decades-long track record of success in brand building and strategy development.
Mr. Elnawawi held prominent posts at Procter & Gamble (PG) Company and Reckitt Benckiser (RB), leveraging superior consumer insight and
strategic thinking at both posts. He currently serves as Director, Consumer & Market Insight, Developing Markets at RB
Global Executive MBA from Tsinghua – INSEAD, China-Singapore, Post Graduate Degree in Feasibility Studies and Project Appraisal from
Cairo University and a BA in Economics from Cairo University.
Ahmed Elnawawi
Independent Director
23
III Key Investment Highlights
8 Experienced Management TeamSeasoned board of directors with diverse experience across various industries
Source: Company Management
42 years of experience in finance and banking.
His experience included serving as Head of Treasury at Faisal Islamic Bank, until 2016, and Assistant General Manager at Delta Bank.
B.A in Economics from Cairo University.
Hany Badr
Independent Director
38 years of experience across various industries including healthcare, agriculture, FMCG, and financial services, where he co-founded various
successful businesses including Chipsy, Al Shorouk Hospital, and Al-Masreyin Dairy.
Currently serves as the Chairman of the Egyptian Agricultural Production Company.
B.A in Commerce from Cairo University.
Abdel Aziz Ali
Non-Executive Director
Over 35 years of experience in finance and banking.
Abdel Rehim has spent his entire finance career at Faisal Islamic Bank where he currently serves as General Manager. He also heads the
bank’s internal audit function.
B.A in Finance and Commerce from Ain Shams University.
Abdel Rehim Omar
Non-Executive Director
Over 10 years of experience in consulting and social services.
Mohamed is currently a research analyst at the United Nations Migration Agency in Egypt. Prior to that, he was a consultant at
PricewaterhouseCoopers.
B.A in Business Administration from the American University in Cairo, M.S and PhD in Social Anthropology from London School of Economics
(LSE).
Mohamed Zaki
Non-Executive Director
11 years of experience across multiple industries including financial services, consulting and consumer products.
Mohamed is the founder of Sky Supplies; serves on the boards of Dar El Khebrah Consultancy and Mediterranean Securities Brokerage.
B.A in Marketing and International Business from Middlesex University.
Mohamed Mahgoub
Non-Executive Director
28 years of pharmaceutical industry experience with focus on pharmaceutical sales.
Ahmed has held various sales positions at multinational companies including Glaxo Smith Kline and Bristol Myers Squib.
B.A in Business Administration from Ain Shams University.
Ahmed Abdel Gawad
Non-Executive Director
24
Experienced Management TeamOrganizational Structure
III Key Investment Highlights
8
Executive Chairman Mohsen Mahgoub
Board of Directors
Co-CEO
Mahmoud Abdel Gawad
Co-CEO
Omar Abdel Gawad
Marketing Manager
Mostafa Salama
HR Director
Ahmed Refaat
Sales Director
Rabeea Marzouk
CFO
Mo’men Gomaa
Operations Director
Mohamed Adel
Commercial Director
Ibrahim Emam IT Director
Amro Khorshid
Administration Manager
Mohamed Hasan
Quality Manager
Mohamed Hosny
Internal Audit Manager
Osama Bakr
18
2062,1533812,2575191
88
378
Executive Committee
Business Review Committee
Management Committees
Audit Committee
Board Committees
Remuneration Committee
Business Development Committee
Investment Committee
Source: Company Management
IR Manager
Mohamed Shawky
1
25
Appendix
26
A significantly complex industry with high barriers to entry
Operational Complexity
Investment
EGP1.5bnThe business requires
a significant amount of
infrastructure to be
able to cater to
geographically
dispersed clientele.
Low Margin Business
1.6%Both developed and
emerging market peers have
an average net profit margin
of 1.6%; reducing the
attractiveness of venturing
into this market space
A Crowded Market
Space
A large number of players
targeting different segments of
the market (in terms of client
quality and demand size) with
the three largest players
controlling 68% of the market
Ease of Operations
Both manufacturers and
pharmacies prefer to deal
with few distributors which in
return significantly reduces
order processing and
management costs; large
distributors then redistribute
to the smaller players
Barriers to Entry
Working Capital Management
Dealing with a large client base, with
significant geographic disbursement,
emphasizes the complexity of credit
control management. Pharmaceutical
distributors must aggregate client credit
history to be able to minimize bad
debts, which requires significant on the
ground experience
Economies of Scale
A human resource based
business accustomed with a large
workforce leads to significant
fixed costs. Additionally, the
aggregation of delivery volume
reduces delivery costs therefore
the total cost per shop does not
increase significantly with volume.
Geographically
Dispersed Client Base
Over 60k outlets and
locations are geographically
disbursed across the
Country
A Variety of
SKUs
9k unique drug therapies
with a variety of handling
requirements including
fragile containers, liquids,
and refrigerated products
High Variability of
Demand
Short-notice, short-turn
deliveries occur frequently
and require rapid response
from distributers
Labor Intensive
Business
To become a nationwide
distributor, new entrants
need to recruit, train, and
manage a workforce of over
5,000 personnel
A number of factors protect Ibnsina
Pharma from new market entrants
IV Appendix
Time to Build Scalable
Operations
8+ YearsNationwide distributors require a
minimum of 50 sites and over 500
vehicles. New entrants will not be
able to manage opening more
than 6 branches a year
Difficulty Contracting
with Suppliers
350+ suppliers with
rigorous contracting
requirements, including
quality audits, disables new
entrants from obtaining
credit lines
Inventory
Management
Highly complex inventory
management to maintain
healthy levels without over
stocking or running short in a
large number of branches
EGP1.5bn+
Source: IMS, Bloomberg, Company Management
27
Income Statement
IV Appendix
Source: Company Management
(1) Gross revenue includes transportation revenue
In EGP 2014 2015 2016 2017 9M2017 9M2018 YoY Change
Gross Revenue 1 4,301,516 5,439,119 7,372,467 9,818,405 6,872,056 9,682,528 41%
Net Revenue 4,197,376 5,327,728 7,205,983 9,586,344 6,715,210 9,433,386
Cost Of Revenue (3,889,670) (4,931,515) (6,636,864) (8,759,914) (6,117,421) (8,625,580)
Gross Profit 307,706 396,213 569,118 826,430 597,789 807,806 35%
Gross Profit Margin 7.2% 7.3% 7.9% 8.6% 8.90% 8.56%
Selling, General & Administrative (187,399) (244,459) (346,502) (431,815) (312,037) (411,724)
Penalties On Returned Checks 1,792 3,296 5,579 11,241 9,035 10,967
EBITDA 122,099 155,050 228,195 405,856 294,787 407,049 38%
EBITDA Margin 2.8% 2.9% 3.1% 4.1% 4.39% 4.31%
Depreciation & Amortization (11,037) (18,792) (26,790) (31,097) (22,609) (30,650)
EBIT 111,062 136,258 201,406 374,760 272,177 376,399 38%
EBIT Margin 2.6% 2.5% 2.7% 3.8% 4.05% 3.99%
Financial Expenses (48,880) (56,331) (74,272) (115,830) (83,917) (82,125)
Other Expenses (7,408) (5,912) (3,173) (37,559) (4,112) (42,841)
Other Income 7,481 1,873 9,137 6,326 2,929 2,330
EBT 62,255 75,888 133,098 227,697 187,078 253,762 36%
EBT Margin 1.4% 1.4% 1.8% 2.3% 2.79% 2.69%
Differed Tax (2,379) 3,035 4,793 (600) (409) 1,672
Income Tax (22,335) (21,564) (36,143) (56,960) (43,589) (67,084)
Net Profit 37,541 57,358 101,748 170,137 143,080 188,350 32%
Net Profit Margin 0.9% 1.1% 1.4% 1.8% 2.13% 2.00%
28
Balance Sheet
IV Appendix
Source: Company Management
In EGP 2014 2015 2016 2017 Sep-2017 Sep-2018
Property & Equipment, net 118,666 152,479 171,327 210,264 182,849 225,115
Other Assets 2,840 5,307 6,667 8,804 8,833 7,547
Project Under Construction 25,864 13,787 47,639 161,267 148,745 431,386
Deferred Income Taxes 3,876 6,911 11,704 11,104 11,294 12,776
Total Long Term Assets 151,246 178,485 237,336 391,438 351,721 676,823
Inventories 427,320 455,770 611,993 1,050,549 887,203 1,100,489
Incoming Documents for Collection 316 442 2,357 273 - 11,107
Trade & Notes receivable, net 1,127,421 1,379,307 1,946,304 2,459,296 2,201,244 3,350,287
Supplier Advances 12,576 30,652 59,951 101,360 104,681 219,792
Debtors & Other Debit Balance, net 90,029 135,714 153,602 165,718 125,275 198,404
Due from Related Parties 371 371 372 372 372 372
Cash & Cash Equivalent 16,368 32,866 43,880 164,791 193,454 77,471
Total Current Assets 1,674,402 2,035,123 2,818,459 3,942,358 3,512,227 4,957,921
Total Assets 1,825,648 2,213,607 3,055,796 4,333,796 3,863,950 5,634,744
Paid In Capital 20,000 24,000 24,000 168,000 168,000 180,500
Share Premium 0 148,000 0 0 - 277,500
General Reserve 0 0 147,079 3,079 3,079 3,079
Legal Reserve 6,334 8,211 12,000 12,000 12,000 20,507
Retained Earnings 46,255 13,000 26,944 62,980 62,980 216,161
Net Profit For The Year 37,541 57,358 101,748 170,137 143,080 188,350
Total Shareholders' Equity 110,131 250,570 311,771 416,196 389,139 886,098
Non-current portion of medium term loan 21,978 14,768 29,632 25,083 31,532 48,670
Non-current notes payable 23,880 35,861 20,312 7,660 9,279 16,822
Other Non-current liabilities 0 0 11,251 20,815 16,217 21,235
Non-current portion of land creditors 212 141 71 0 71 -
Total Long-term Liabilities 46,070 50,771 61,266 53,559 57,099 86,726
Credit facilities 206,501 156,686 68,644 6,952 415,194 286,223
Contingency provision 0 600 3,100 24,067 2,066 53,860
Customers Advance Payments 4,757 6,003 6,324 6,453 2,595 3,655
Current portion of land creditors 401 1,001 101 71 71 71
Trade and notes payable 1,389,370 1,678,860 2,519,985 3,700,786 2,882,952 4,155,718
Current portion of medium term loan 25,212 24,866 13,112 25,794 25,794 34,358
Creditors & other credit balances 43,206 44,251 71,492 99,919 89,040 128,036
Total Current Liabilities 1,669,447 1,912,267 2,682,759 3,864,041 3,417,712 4,661,920
Total Liabilities & Shareholders Equity 1,825,648 2,213,607 3,055,796 4,333,796 3,863,950 5,634,744
29
Executive Summary
Company Overview
Key Investment Highlights
Financial Performance Review
Contact Information
1
2
3
4
5
Contents
Contact Information
30
Contact Information
V Contact Information
Mohamed Mahmoud ShawkyInvestor Relations Manager
Tel.: +2010 00852771
Email: shawky@Ibnsina-pharma.com
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